Chapter 3: The forensic science market
The shape of the current market
40.Some of the most concerning evidence we received was about the state of the forensic science market. The private market is dominated by three large providers, all of which have experienced some form of instability in the last year:
- LGC Forensics, the largest private forensic science provider in the UK forensics market, has been acquired by Eurofins Forensic Services (EFS)
- Key Forensic Services almost collapsed before being bought by CorpAcq (not a private forensic science provider but a corporate acquisition company), and the police had to pay to keep it operational for three months while outstanding contracted work was completed
- Orchid Cellmark Ltd (who trade as Cellmark Forensic Services) was acquired in a management buyout from its former US parent company LabCorp.46
The market is also served by a number of smaller private forensic science service providers, some of which employ only one or two people.
41.In December 2010 the Government announced the closure of the Forensic Science Service, citing losses averaging £2 million per month as the reason. Following the announcement, the House of Commons Science and Technology Committee conducted an inquiry into the closure. It concluded that the Government did not give “enough consideration to the impact on forensic science research and development (R&D), the capacity of private providers to absorb the FSS’s 60% market share and the wider implications for the criminal justice system”47 when making the decision and warned of the possibility of serious market instability. They were right.
42.Since the closure of the Forensic Science Service in 2012, certain forms of forensic science analysis are increasingly carried out ‘in-house’ within police forces, especially disciplines like fingerprint analysis and digital forensics. Currently “the forensic marketplace accounts for about 20% of service provision for law enforcement in forensic services”48 by value, with the remaining 80% of forensic science work conducted by in-house employees of police forces.
43.At the same time, there has been a large reduction in spending on forensic science services. Andrew Rennison, a Commissioner at the Criminal Cases Review Commission and former Forensic Science Regulator, told us that in 2008, “there was probably £120 million being spent on forensic science. That is now down to about £50 million or £55 million”.49 The total police budget for 2018/19 was £12.3 billion.50
44.Between 2012/13 and 2014/15, spending on forensic science services by police fell at the same rate as total police expenditure but “spending on commercial providers fell more sharply, by approximately 29%.”51
45.This has contributed substantially to market fragility, which was predicted when it was announced that the Forensic Science Service would be disbanded.52 A number of witnesses said that the state of the forensic science market in England and Wales was unsustainable and in need of urgent reform.53
46.In recent years events such as Key Forensic Services going into administration and Randox Testing Services being suspended from providing toxicology services have produced knock-on effects for other providers and the criminal justice system more broadly. These fluctuations in the market can create problems with “the capture of exhibits, notes, the experts and the computer systems which go with that”,54 as well as “increased turnaround times”55 for police forces. Witnesses told us about instances in which forensic tests took up to six months to perform, thus delaying trials.56 It was suggested by Sir Brian Leveson, President of the Queen’s Bench Division and Head of Criminal Justice, that the pressure in the system when Key Forensic Services was in administration led to “an increased error rate … although one cannot say anything about cause and effect.”57
47.Dr Gillian Tully listed the risks to the criminal justice system of a forensic science provider exiting the market in an uncontrolled way in future:
- “loss of continuity of exhibits;
- degradation of exhibits (e.g. if electricity were to be cut off);
- disruption to production of reports for individual cases;
- lack of capacity in the remaining market;
- further loss of skills from the profession, particularly among the more experienced staff, some of whom have been made redundant more than once;
- loss of records that are not case-specific (e.g. records of training and competence of staff, records of calibration and maintenance of equipment);
- loss of corporate memory, whereby the terminology and detail enabling case files to be understood and methods re-created are lost; and
- disruption to defence examination in cases, when equipment used can no longer be inspected.”58
48.While there are concerns about the current state of the market, we did not hear convincing arguments in favour of resurrecting the Forensic Science Service. Its loss was regrettable, but some aspects of forensic science provision, such as cost and turnaround time of routine cases, have improved in the last few years. Our recommendations are therefore made in the context of maintaining a mixed market approach.
Tendering and procurement
49.Any consideration of the instability of the forensic science market must take account of the commissioning models and tendering processes. Procurement of forensic services from private providers is largely run by the 43 police forces and their Police and Crime Commissioners in England and Wales. As Carolyn Lovell, Head of Operations for Crime Scene Investigation at Hampshire Constabulary told us, every force is having their budget “restricted and they will be restricted again next year”.59 She suggested that enforcing price increases for work by private providers would mean that forces would have to “review what we submit and perhaps no longer submit certain aspects of our work to them because we do not have any other financial resources”.60
50.Another distinctive feature of the forensic science market is that police forces are essentially the sole customer for private providers in any given region and when they join together in buying forensic services they act like a monopsony “in which the market fails and prices are driven down excessively. The risk of losing the customer becomes an existential issue for the supplier.”61
51.We heard that there are two procurement models in the current market and they each exert different pressures.
Commoditised procurement
52.There is a model of procurement which focuses on cost and quick turnaround time. The defining feature of this model is the emphasis on price. David Hartshorne, Managing Director of Cellmark Forensic Services, explained how a few years ago, price “was considered to be about 40% of the evaluation of a tender, now it is 60% and, in some areas, even higher than that.”62 This emphasis, coupled with a dominant customer, has led to “a 30% or 40% erosion in pricing over six to seven years.”63
53.Chief Constable James Vaughan told us that the:
“commoditised model has forced the suppliers to a point where they are competing so heavily on price, and the contracts are so big and they come around so infrequently that when they bid for work, there is a fear they will lose the market share and bring their prices right down to, in my view, an unsustainable level.”64
54.This has affected some areas of forensic science more than others. Eurofins Forensic Services estimated that there had been a “30–40% reduction in revenues in areas such as drugs, DNA and toxicology. If one takes a longer window we have seen a 70–90% price erosion in some areas since the later [Forensic Science Service] years.”65
Managed service procurement
55.More recently, some police forces have procured forensic science services using a managed service model. This is where “a large provider—and really only the large providers can operate in that space—works very closely with a police force or a police region, and in some cases those regions are 20 police forces”.66In this model the police force or forces contract long-term for all the forensic science services they need in return for a fixed price. These contracts can be for up to 10 years, providing long-term stability and certainty for the large provider, but leaves little space for smaller providers, many of which are the only ones able to offer scientific analysis in niche disciplines.
56.The Metropolitan Police Service explained that they have moved “to a commercial partnering arrangement with the private sector entering into a long-term contract, with joint ownership of risk, investment, development and implementation of new science such as rapid DNA analysis and contractual arrangements that recognise the fragility of the market.”67
57.A downside to this model is that it leaves “the remaining providers vulnerable and at the mercy of the winning provider hoping they will offer them some subcontracting work; these enormous swings in work provide further uncertainty in the marketplace.”68
Terms and conditions of contracts
58.In addition to the difficulties created by the procurement models, private providers are struggling to cope with some of the terms and conditions attached to contracts with police services. Eurofins Forensic Services told us that “the vast majority of contracts require bidders to sign up to zero inflation over the duration. With a baseline RPI of typically 3%, wage inflation of 1–2% and other increasing costs such as the need to invest in accreditation … this is challenging.”69
59.Despite “suppliers in the [England and Wales] market … now on the whole delivering services up to ten times quicker than in other parts of the UK and in other European countries”, Eurofins Forensic Services described timeliness requirements in contracts which are “extremely challenging and require a disproportionate level of investment to achieve. It is now recognised by many in the sector that a delivery requirement that is linked to [criminal justice system] processes would be much better.”70
60.Timeliness penalties in these contracts are delivered via a “service credit regime … which effectively fine suppliers for late delivery. Whilst there should of course be drivers on suppliers to ensure on-time delivery the current regimes do not reward consistency or reliability and can result in very disproportionate penalties”,71 which may affect quality.
Other features of procurement contracts
61.Another issue which has exacerbated market instability is the timing of police tenders. David Hartshorne told us that “towards the back end of 2016, about 75% of all the police work in the country went out to tender at the same time. It meant that 2017 was particularly difficult.”72
62.This was because “before 2006 police forces often tendered as individual forces; regional tendering then became more common (with 5–6 forces bidding together); and then in 2016, 19 (out of 43) police forces tendered their work in a combined tender … and the bid overlapped with two other very major forensic tenders.”73
Effect of procurement models on smaller and niche service providers
63.The models of procurement, especially the short-term focused commodity-based procurement, have had a substantial impact on the ability of private providers to offer services in niche disciplines. Stan Brown CBE, Chief Executive of Forensic Service Northern Ireland, explained:
“each sizeable forensic laboratory will have a number of different specialisms, and there is a minimum irreducible size for each specialism below which it is not sustainable. You have to have peer review of every report, for example. They will have to make a decision at a certain point to discontinue a particular specialism. To rekindle a specialism from scratch would take three years, because you have to get the people and train them up to the official competencies, validate your instruments [etc.]”.74
64.Our evidence suggests that some specialisms are at risk of dying out because they are no longer sustainable for business purposes. The Knowledge Transfer Network Forensic Science Special Interest Group told us that “physical trace evidence types (such as glass, paint and fibres) that may be of value to the investigation are generally not sent for forensic analysis due to the cost … This impacts on maintenance of competence in accredited organisations adding to costs, impacting further on the financial position of providers.”75
65.David Hawksworth CBE, a forensic mycology76 practitioner, said that this was also the case in his area of expertise: there had been “a reduction of perhaps 5–6 cases per year down to 1–2 or zero over the last decade, which means that it is no longer economic to pay for inclusion in directories of available experts, membership of forensic bodies (e.g. Chartered Society for Forensic Science), or fees for courses on court procedures.”77
Options for different procurement models
66.In order to stabilise the market, procurement models will need to change substantially. Witnesses suggested that the managed service model, which allows for longer term contracts, is preferable because it would “allow for the building of strong relationships within the whole investigative process. It would ensure that the forensic science provider can invest in the development of its staff.”78 However, the model would need to alter to mitigate against the ‘winner takes all’ effect, which is debilitating to smaller providers and niche disciplines. Randox Testing Service suggested that this could be done by promoting “multiple awards within contracts, ideally directly to suppliers”.79
67.To curb further reductions in price, the Metropolitan Police Service suggested bringing in a “nationally agreed minimum cost per analysis. It may be difficult to come to an agreed minimum cost but doing so should ensure that providers do not undercut competitors at the expense of quality.”80
68.Randox Testing Services suggested reducing “the weighting of pricing within tender evaluation, to no more than 40%” and introducing “procurement programming to ensure around 20% of contracts are re-tendered and awarded each year.”81
Forensic Science Market Regulator
69.The evidence we have received points to the need for a body to oversee the market and ensure continuity of service provision. Amongst other things, this body could consider whether it would be beneficial to specify the percentage share of the market that should be taken by private companies versus public providers. Rather than establishing a new body, the remit of the Forensic Science Regulator could expand to include this function. To enable this the resources and budget of the Forensic Science Regulator would need to increase. The regulatory body would also need staff with experience of market regulation.
70.Dr Gillian Tully told us that any regulator tasked with overseeing the market would need to be able to “control national spending on forensic science” in order to be “effective in securing long-term resilience”. In practice, “this would require that the oversight body:
- had the power to define the minimum level of overall spending on forensic science required to maintain resilience and protect the interests of justice;
- could centrally control the budget for forensic science, i.e. the budget would be “top-sliced” from police and potentially [Legal Aid Agency] budgets rather than being locally delegated to Chief Constables and Police and Crime Commissioners; and
- had statutory power to set an appropriate pricing structure.”82
71.While Dr Tully acknowledged that this proposal, especially in relation to centrally controlled spending, “may seem extreme”, she emphasised that “the potential for further major exits from the market and/or loss of a range of disciplines hangs in the balance; continuing to lurch from crisis to crisis is untenable.”83
72.The instability of the forensic science market is a serious risk to the criminal justice system. We recommend that the Forensic Science Regulator’s remit and resources be reformed and expanded to include responsibility for regulating the market.
73.The expanded role of the Forensic Science Regulator should review the structure of the market for forensic science in England and Wales and, in particular, the procurement process for commissioning private sector providers alongside provision by police forces. The objective should be to determine a procurement model which balances price, quality and market sustainability; ensures a level playing field between private and public sector providers; avoids undue shocks to the market, such as the clustering of contracts in any one year; and which maintains the capabilities of small providers in niche disciplines.
47 Science and Technology Committee, The Forensic Science Service (Seventh Report, Session 2010–12, HC 855), p 3
50 National Audit Office (NAO), Financial sustainability of police forces in England and Wales 2018, HC 1501, 11 September 2018, p 4: https://www.nao.org.uk/wp-content/uploads/2018/09/Financial-sustainability-of-police-forces-in-England-and-Wales-2018.pdf#page=6 [accessed 20 March 2019]
52 Science and Technology Committee, The Forensic Science Service (Seventh Report, Session 2010–12, HC 855); Additionally, “A report produced by McKinsey & Co for the National Policing Improvement Agency in 2008 identified a series of risks associated with the forensic science market, including lack of stability, lack of investment confidence and slow innovation and supply chain issues, which contributed to uncertainties about the future size and shape of the market. The latter also reflected a lack of clarity about how the market would develop (McKinsey & Co 2008)” from Christopher Lawless, Forensic Science: A sociological introduction (Routledge, 2016), p 152
53 See written evidence from Forensic Science Northern Ireland (FSNI) (FRS0006), Forensic Video Services Ltd (FRS0010), Danyela Kellett (FRS0035), NCECJS (FRS0038), Forensic Equity Ltd (FRS0039), Mrs Angela Forshaw (FRS0046), Key Forensic Services Ltd (FRS0048), Dr Gillian Tully (FRS0057), Keith Borer Consultants (FRS0061), EFS (FRS0063), Metropolitan Police Services (MPS) (FRS0064), Forensic Access (FRS0066), University of Edinburgh (FRS0067), NPCC Transforming Forensics Programme (FRS0070), Cellmark Forensic Services (FRS0071), Millington Hingley Ltd (FRS0075), University of Leicester (FRS0082), Royal Statistical Society (RSS) (FRS0086). See also Q 103 (Tom Nelson OBE), Q 178 (Sir Brian Leveson).
56 See, for instance, written evidence from Professor Peter Sommer (FRS0009), Infra Tech Forensics (Video) Ltd (FRS0028), and Robert Green OBE (FRS0031).
60 Ibid.
71 Ibid.
76 Mycology is used in estimating times or death or events by using known growth rates of fungi, in providing trace evidence, and in locating corpses. It also includes causes of death or illness by fungi poisoning, and fungi as used in biological warfare. See David L. Hawksworth and Patricia E.J. Wiltshire, ‘Forensic mycology: the use of fungi in criminal investigations’, Forensic Science International, Volume 206, Issue 1–3 (20 March 2011), pp 1–11: https://www.sciencedirect.com/science/article/pii/S0379073810003099 [accessed 20 March 2019]
83 Ibid.